Legal Steps to Take When Renting Commercial Property in Wisconsin
Renting commercial property in Wisconsin can be a strategic move for businesses looking to expand, but it is crucial to understand the legal steps involved to ensure a smooth transaction and protect your interests. Below are the essential legal steps to consider when renting commercial property in Wisconsin.
1. Research Zoning Laws
Before signing a lease, it is vital to check the local zoning laws for the property. Each municipality in Wisconsin has specific zoning regulations that dictate what types of businesses can operate in particular areas. Make sure the property is zoned for your intended use to avoid legal issues down the line.
2. Conduct a Thorough Due Diligence
Due diligence is a critical step when renting commercial property. This process involves inspecting the property, reviewing its current condition, and checking for any existing liens or legal issues. Hiring a professional inspector can help identify any potential concerns that may influence your decision.
3. Understand the Lease Agreement
Understanding the lease agreement is crucial. A commercial lease can be significantly more complex than a residential lease, encompassing terms related to rent, maintenance responsibilities, duration of the lease, and renewal options. Ensure you read and comprehend each clause, and consider consulting with a legal professional if needed.
4. Negotiate the Lease Terms
Once you have reviewed the lease agreement, you may find areas that require negotiation. Key points to consider may include the amount of rent, lease duration, property improvements, and termination clauses. It’s essential to negotiate terms that best suit your business needs while also being fair to the landlord.
5. Review Security Deposit Requirements
Most landlords require a security deposit as a part of the leasing process. In Wisconsin, security deposits are typically limited to one month’s rent but can vary. Understand the conditions under which the deposit will be returned, including what constitutes normal wear and tear versus damage.
6. Obtain Necessary Permits and Licenses
Before moving into the commercial space, ensure that you have obtained all necessary permits and licenses required to operate your business legally. This may include business licenses from the city or county, employee permits, health permits, or any industry-specific licenses relevant to your operation.
7. Draft an Exit Strategy
No one can predict the future, and circumstances may arise that necessitate moving your business. An exit strategy in your lease can help you mitigate losses. Look for provisions that allow for subleasing, early termination, or transfer of lease rights under specific conditions.
8. Discuss Insurance Requirements
Most landlords will require tenants to carry certain types of insurance, such as general liability insurance, to protect both parties from potential risks associated with the property. Discuss what coverage is needed and ensure you have the appropriate policies in place before taking possession.
9. Comply with Accessibility Laws
In Wisconsin, commercial properties must comply with the Americans with Disabilities Act (ADA) and state accessibility laws. Ensure that the property meets required accessibility standards and that your business operations will not violate these laws.
10. Consult a Real Estate Attorney
Before finalizing any commercial lease, consulting a real estate attorney can provide significant benefits. An experienced attorney can offer valuable advice on the lease's legal implications, suggest amendments to protect your interests, and ensure compliance with local laws.
By following these steps, businesses can navigate the complex process of renting commercial property in Wisconsin with greater confidence. Taking the time to understand your legal obligations and rights can save you time, money, and potential headaches in the future.